Godrej Agrovet Navigates Q2 FY26 with Strategic Resilience

Godrej Agrovet Limited has presented a mixed yet strategically focused performance for the second quarter and first half of fiscal year 2026. The company reported consolidated revenues of INR 2,567 crores for Q2 FY26, marking a 5% year-on-year growth. For the first half (H1 FY26), consolidated revenues reached INR 5,182 crores, an 8% increase year-on-year. Profit before tax (PBT) for Q2 FY26 remained flat at INR 125 crores, excluding non-recurring items, while H1 FY26 PBT grew a robust 14% to INR 313 crores, also excluding non-recurring items. This performance highlights the company's ability to drive growth in key segments while actively addressing challenges in others.

Segmental Performance: A Tale of Two Halves

The Animal Feed segment emerged as a strong performer, delivering record quarterly volumes, primarily driven by an 18% year-on-year growth in cattle feed. This was attributed to sustained market share gains and strong operational efficiencies. Despite lower average realizations due to softening commodity prices, underlying segment margins improved by approximately 70 basis points year-on-year. The Vegetable Oil business posted stellar growth, with revenue up 41% year-on-year and margins expanding to an impressive 22.4% in Q2 FY26. This was fueled by higher crude palm oil (CPO) and palm kernel oil (PKO) realizations, coupled with the highest-ever Oil Extraction Ratio (OER) achieved during the quarter.

In contrast, the Crop Protection segment faced significant headwinds, with revenue declining by 30% year-on-year in Q2 FY26 and a 62% drop in segment results. This was primarily due to excessive and widespread rainfall across key markets, which reduced spraying opportunities and impacted crop acreages. Astec LifeSciences, the agrochemical active ingredients manufacturer, saw its revenue fall 25% year-on-year due to cautious contract manufacturing demand. However, its enterprise category grew 15% year-on-year, and EBITDA improved due to higher volumes and stronger gross margins. The Creamline Dairy business remained broadly flat on revenue and EBITDA, but its value-added products (VAP) grew 10%, increasing their contribution to total sales to 36%. Godrej Foods Limited reported EBITDA growth of 28% year-on-year, driven by strong performance in branded products, with Yummiez delivering 19% growth and branded salience rising to 86%.

Here is a financial summary of the company's performance:

Strategic Initiatives and Future Outlook

Management is proactively addressing the challenges in the Crop Protection segment through diversification. The company has made a strong entry into the maize crop segment with its new product, Ashitaka, and is pursuing extended label claims for existing products to cover a wider range of crops. A new pan-crop product launch is anticipated in Q4 FY26, with several more planned for FY27-FY29. For Astec LifeSciences, the focus is on building a robust go-to-market B2B strategy and strengthening the product pipeline, with a target to achieve EBITDA breakeven by the end of the fiscal year.

Godrej Agrovet is also undertaking a comprehensive strategy refresh exercise, aiming to simplify its business portfolio, identify multiple pillars of growth, and further enhance its value-added product offerings across all segments. This includes 'Project PI', a company-wide initiative focused on driving cost efficiencies and improving margins. The company's commitment to sustainability is evident in its ESG initiatives, which include a 78.6% renewable energy portfolio, 13x water conservation, and a 10% reduction in Scope 1 & 2 GHG emissions. These efforts underscore a disciplined approach to capital allocation and operational excellence.

Conclusion: Focused on Sustainable Growth

Godrej Agrovet's Q2 and H1 FY26 performance reflects a company that is strategically adapting to market dynamics. While facing temporary setbacks in certain segments due to external factors, the core businesses demonstrate strong operational resilience and growth potential. The management's clear focus on diversification, value-added products, and cost management, coupled with robust ESG commitments, positions Godrej Agrovet for sustained and healthy growth in the long term. The upcoming FY30 GAVL unleash model, expected by the end of March, will provide further clarity on the company's ambitious future trajectory.